Gold, Silver, Oil, SP500 & USD Long-Term Trends

Source: Chris Vermeulen, TheGoldAndOilGuy (3/3/11)

"After recent run in gold and silver, I expect a quick pullback before they go higher."

Trading with multiple timeframes—every now and then, it's always a good idea to look at some different timeframes to be sure you have a solid understanding for the longer-term trends in play. I will admit, it's easy to get caught up in trading the shorter timeframes like the 1-, 10- and 60-minute charts, especially when there are large intraday movements. But every night you must reset your thinking by looking at the bigger picture.

Below are weekly and daily charts, which, I think, provide a big-picture view of things.

SPY SP500 Index Fund—Weekly Chart

You will see that in both 2009 and 2010 we saw a 5-8% correction down to the key moving averages. I feel that we are in store for a similar pullback in 2011. After that we will most likely continue higher.

U.S. Dollar Index—Weekly Chart

The dollar is trading down at a key support level, which I am keeping a close eye on. If we get a close below this trendline, then we should see the dollar selloff sharply, which in turn will trigger another leg higher in commodities across the board.

Crude Oil—Weekly Chart

Crude oil has really taken off because of the fears coming out of the Middle East. From the looks of it the next key pivot level is the $110 level.

Gold—Daily Chart

Both gold and silver have made new highs but after such a run, I expect we see a quick pullback before they go higher. Gold and silver are the two investments I think everyone should hold a core position in for the long run—no matter what happens to the price. But, if we do get a nice quick pullback into the key moving averages, then I think it's a great spot to get involved with more money.

Midweek Trend Report

I am bullish on stocks and commodities and bearish on the dollar and bonds. The one issue I see going forward is that, if the dollar breaks down, it will most likely help boost oil prices, which in turn puts downward pressure on stocks. So, depending on how things unfold in the Middle East and a falling dollar, we may not see higher stock prices. Some individuals are forecasting $150–$220/barrel and I know if it gets back up there it will definitely slow the economy and stock prices down.

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